Anacom draws ire from Portuguese operators over 5G auction changes

To say that Portugal’s 5G spectrum auction is progressing slowly is something of an understatement. The bidding process has now been ongoing for more than 100 days, a European record, and there is no clear end in sight.

 

The auction, which is set to make 5G spectrum available to Portuguese operators for the first time, will allocate blocks in the 700 MHz, 900 MHz, 2.1 GHz, 2.6 GHz, and 3.6 GHz bands. By day 99 of the bidding, bids had reached €318.8 million, topping the reserve price of €195.5 million.

 

Why exactly the bidding process is going so slowly is unclear, but the operators are being very cautious, with each of the operators bidding in tiny increments each round. There has been over 580 rounds of bidding already recorded and many these have seen the operators improve on a rival bid by only 1%.

 

“There is a serious risk, if the pattern of bids observed so far is maintained, that the auction will last for a period much longer than initially anticipated (and much longer than the normal duration of these procedures in the vast majority of states of the European Union),” said Anacom last week, suggesting that this process could cause a significant delay to Portuguese 5G deployment.

 

Back in April, Anacom tried to increase the pace of the bidding by increasing the number of daily bidding rounds from six to seven. Last week, it went one step further, increasing the number of daily rounds to twelve. The regulator also noted that if the situation does not improve, it could implement more drastic changes to the auction, such as disallowing the current minimum bidding increases, thus forcing the operators to bet bigger on the spectrum they want.

 

Naturally, these changes to the structure of an auction already underway have been met with condemnation by Portugal’s three major telcos. A source from Nos accused the regulator of “gross negligence”, saying that  “nobody is questioning the regulator and holding it responsible for the incalculable damage caused to the Portuguese” and blaming the entire delay on Anacom. 

 

Vodafone Portugal was similarly frustrated, calling the move “proof of authoritarianism” and saying “it cannot accept and consider legitimate rule changes in the middle of the game.”

 

“This change makes clear the amateurishness and lightness with which Anacom launched and is managing the whole process of the 5G auction,” Vodafone told Portuguese media.

 

Altice Portugal expressed its “astonishment” at Anacom’s decision to change the regulations, noting that it would force some employees to work 10-hour days. 

 

How effective these additional daily bidding rounds will be in accelerating the auction process remains to be seen. Ultimately, the operators have a right to increase their bids by the minimum if they so please, at least for now, so are under no obligation to change their tentative bidding strategies.

 

It should be remembered, however, that this auction is taking place at a time when the operators’ relationship with Anacom is already deeply strained. The regulator recently made room for a new market entrant – widely thought to be Spain’s Masmovil, although this is not officially confirmed – who won three blocks of reserved spectrum back in January, much to the existing operators’ chagrin. 

 

Regardless of whether this clash is playing a part in the disgruntled operators dragging out the 5G auction, it is clear that the delay will be significant. Portugal was supposed to roll out 5G in 2020, in line with goals set by the European Commission. Now, even a 5G launch in 2021 is seeming unlikely.